Self-Regulatory Organizations; Nasdaq ISE, LLC; Order Approving a Proposed Rule Change To Amend the Strike Interval for Options on Exchange-Traded Fund Shares and To Allow $1 Strike Price Intervals Above $200 for Options on SPDR Gold Shares (GLD), 55293-55294 [2024-14646]
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Federal Register / Vol. 89, No. 128 / Wednesday, July 3, 2024 / Notices
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeEDGX–2024–039 and should be
submitted on or before July 24, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–14592 Filed 7–2–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100447; File No. SR–ISE–
2024–17]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Order Approving a Proposed
Rule Change To Amend the Strike
Interval for Options on ExchangeTraded Fund Shares and To Allow $1
Strike Price Intervals Above $200 for
Options on SPDR Gold Shares (GLD)
June 28, 2024.
khammond on DSKJM1Z7X2PROD with NOTICES
I. Introduction
On May 3, 2024, Nasdaq ISE, LLC
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Options 4, Section 5 of the
Exchange’s rules to (i) permit options on
exchange-traded fund shares to have an
interval of $1 or greater where the strike
price is $200 or less and $5.00 or greater
where the strike price is greater than
$200 and (ii) list options on SPDR®
Gold Shares (‘‘GLD’’) with $1 strike
price intervals instead of $5 strike price
intervals when the strike price of the
option is greater than $200. The
proposed rule change was published for
comment in the Federal Register on
May 20, 2024.3 The Commission did not
receive any comment letters on the
proposed rule change. This order
approves the proposed rule change.
II. Description of the Proposal
Currently, Options 4, Section 5 of the
Exchange’s rules provides that the
interval between strike prices of series
of options on exchange-traded fund
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 100133
(May 14, 2024), 89 FR 43936 (‘‘Notice’’).
1 15
VerDate Sep<11>2014
19:36 Jul 02, 2024
Jkt 262001
shares (‘‘ETFs’’) 4 will be fixed at a price
per share which is reasonably close to
the price per share at which the
underlying security is traded in the
primary market at or about the same
time such series of options is first open
for trading on the Exchange, or at such
intervals as may have been established
on another options exchange prior to the
initiation of trading on the Exchange,5
except that the interval between strike
prices of series of options on SPDR S&P
500 ETF (‘‘SPY’’), iShares Core S&P 500
ETF (‘‘IVV’’), PowerShares QQQ Trust
(‘‘QQQ’’), iShares Russell 2000 Index
Fund (‘‘IWM’’), and the SPDR Dow
Jones Industrial Average ETF (‘‘DIA’’)
may be $1 or greater.6
The Exchange proposes to establish
an alternative to the strike price interval
regime described above. Specifically,
ISE would also allow the interval for
options on ETFs to be $1 or greater
where the strike price is $200 or less
and $5.00 or greater where the strike
price is greater than $200.7 As described
above, the Exchange may fix the interval
between strike prices of series of options
on ETFs at such intervals as may have
been established on another options
exchange prior to the initiation of
trading on the Exchange.8 The Exchange
states that today, Cboe Exchange, Inc.
(‘‘Cboe’’) 9 permits the interval between
strike prices of series of options on ETFs
to be $1 or greater where the strike price
is $200 or less and $5.00 or greater
where the strike price is greater than
$200.10 The Exchange states that its
proposal adopts Cboe’s language.11
The Exchange also proposes to permit
strike intervals to be $1 or greater where
the strike price is greater than $200 for
options on GLD,12 similar to options on
SPY, IVV, QQQ, IWM, and DIA.13 The
Exchange states that $1 strike price
intervals already exist below the $200
Exchange Rule Options 4, Section 3(h).
Exchange Rule Options 4, Section 5(d).
6 See Exchange Rule Options 4, Section 5(e).
7 See proposed Exchange Rule Options 4, Section
5(d).
8 See supra note 5.
9 See Cboe Rule 4.5, Interpretation and Policy
.07(a).
10 See Notice, supra note 3, at 43936.
11 See id.
12 According to the Exchange, GLD is an ETF
whose shares are designed to closely track the price
and performance of the price of gold bullion. See
id. The Exchange states: ‘‘GLD is widely quoted as
an indicator of gold stock prices’’ and the ‘‘leading
product in its asset class that trades within a
‘complex’ where, in addition to the underlying
security, there are multiple instruments available
for hedging such as, COMEX Gold Futures; Gold
Daily Futures; iShares GOLD Trust; SPDR GOLD
Minishares Trust; Aberdeen Physical Gold Trust;
and GraniteShares Gold Shares.’’ Id.
13 See proposed Exchange Rule Options 4,
Section 5(e).
PO 00000
4 See
5 See
Frm 00078
Fmt 4703
Sfmt 4703
55293
price point and that GLD has
consistently inclined in price toward
the $200 level.14 In light of this, the
Exchange believes that continuing to
maintain the current $5 strike intervals
above $200 may have a negative effect
on investing, trading and hedging
opportunities, and volume, particularly
to the extent it impacts the ability of
market participants to roll their
positions once strike prices pass $200.15
The Exchange states that the proposed
strike setting regime will ‘‘permit strikes
to be set to more closely reflect the
increasing value in the underlying and
allows investors and traders to roll open
positions from a lower strike to a higher
strike in conjunction with the price
movements of the underlying ETF.’’ 16
The Exchange acknowledges that the
proposal would increase the total
number of options series available on
the Exchange, but represents that it and
the Options Price Reporting Authority
(‘‘OPRA’’) have the necessary system
capacity to handle any potential
additional traffic associated with the
proposal.17 The Exchange also states
that its members would not have a
capacity issue as a result of the
proposal.18 Further, the Exchange
represents that the proposal would not
cause fragmentation of liquidity but, by
providing more trading opportunities to
market participants, instead would
increase both available liquidity as well
as price efficiency.19
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.20 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,21 which requires,
among other things, that a national
securities exchange have rules designed
to prevent fraudulent and manipulative
acts and practices, to promote just and
14 See
Notice, supra note 3, at 43937.
id. For example, the Exchange states that
‘‘to move a position from a $200 strike to a $205
strike under the current rule, an investor would
need for the underlying product to move 2.5%’’
whereas rolling an open position from a $200 to a
$201 strike represents ‘‘only a 0.5% move from the
underlying.’’ Id.
16 Id.
17 See id.
18 See id.
19 See id.
20 15 U.S.C. 78f(b). In approving this proposed
rule change, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
21 15 U.S.C. 78f(b)(5).
15 See
E:\FR\FM\03JYN1.SGM
03JYN1
55294
Federal Register / Vol. 89, No. 128 / Wednesday, July 3, 2024 / Notices
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Permitting $1 strike price intervals
above $200 in options on GLD will
provide the investing public and other
market participants with more
flexibility in their investment and
hedging decisions using options on
GLD. The proposal is also consistent
with past precedent for options on other
similar ETFs.22 Moreover, the proposal
to specify the interval between strike
prices of series of options on ETFs
where the strike price is less than $200
and where the strike price is greater
than $200 is consistent with the
intervals of another options exchange.23
In approving this proposal, the
Commission notes that the Exchange
has represented that it and OPRA have
the necessary systems capacity to
handle the potential additional traffic
associated with this proposed rule
change.24 The Exchange further stated
that it believes its members will not
have a capacity issue because of the
proposal and that it does not believe
this expansion will cause fragmentation
of liquidity.25
IV. Conclusion
IT IS THEREFORE ORDERED,
pursuant to Section 19(b)(2) of the
Act,26 that the proposed rule change
(SR–ISE–2024–17), be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–14646 Filed 7–2–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100440; File No. SR–
NASDAQ–2024–026]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Expand Its
Co-Location Services
June 27, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 14,
2024, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to expand its
co-location services. The text of the
proposed rule change is available on the
Exchange’s website at https://
listingcenter.nasdaq.com/rulebook/
nasdaq/rules, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
khammond on DSKJM1Z7X2PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
22 See
Securities Exchange Act Release No. 85754
(Apr. 30, 2019), 84 FR 19823 (May 6, 2019)
(allowing $1 Strike Price intervals above $200 on
options on QQQ and IWM).
23 See supra note 11.
24 See supra note 17.
25 See supra notes 18 and 19.
26 15 U.S.C. 78s(b)(2).
27 17 CFR 200.30–3(a)(12).
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19:36 Jul 02, 2024
Jkt 262001
1. Purpose
The Exchange proposes to expand its
co-location services by offering new
cabinet, power, and power distribution
unit options in the Exchange’s
expanded data center.
PO 00000
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00079
Fmt 4703
Sfmt 4703
The Exchange’s current data center
(‘‘NY11’’) in Carteret, NJ is undergoing
an expansion (‘‘NY11–4’’) in response to
demand for power and cabinets. NY11–
4 is not a new or distinct co-location
facility. Instead, NY11–4 is simply an
expansion of the existing Nasdaq NY11
data center,3 and Nasdaq intends to
operate it generally in the same manner
as existing aspects of NY11.4 Client
connections to the matching engine will
be equal across the board, within and
among NY11 and NY11–4. In 2010, the
Exchange undertook a similar expansion
to its data center, where connectivity to
the Exchange remained equalized, as is
the case with the NY11–4 expansion.
The Exchange submits this filing to
propose offering new services in NY11–
4, as described below, and to the extent
the Exchange offers additional new
services, whether in the existing NY11
data halls or in the new NY11–4 data
hall, the Exchange will submit
additional filings with the Commission.
NY11–4 Expanded Cabinet Optionality:
Ultra High Density Cabinet
Currently, co-location customers have
the option of obtaining cabinets of
various sizes and power densities. Colocation customers may obtain a Half
Cabinet,5 a Low Density Cabinet with
power density less than or equal to 2.88
kilowatts (‘‘kW’’), a Medium Density
Cabinet with power density greater than
2.88 kW and less than or equal to 5 kW,
a Medium-High Density Cabinet with
power density greater than 5 kW and
less than or equal to 7 kW, a High
Density Cabinet with power density
greater than 7 kW and less than 10 kW,
and a Super High Density Cabinet with
power density greater than 10 kW and
less than or equal to 17.3 kW.
The Exchange proposes to introduce a
new cabinet choice in NY11–4, an
‘‘Ultra High Density Cabinet,’’ with
power density greater than 10 kW and
less than or equal to 15 kW. Based on
demand, the Exchange wishes to
3 NY11–4 is not a standalone facility. Equinix
considers the site as NY11 with three expansions:
NY11–2, NY11–3, and NY11–4.
4 One aspect of the data center that will be treated
differently in NY11–4 as compared to NY11 at its
outset is telecommunications access and inter-client
connectivity. In NY11–4, connections between
colocated client cabinets and the carrier cage will
be of equal length. Inter-client connectivity will
also be equalized in NY11–4. The Exchange
believes that equalizing telecommunications access
and inter-client connectivity in NY11–4 will
provide a fair solution and avoid market disruption
by avoiding both a race for real estate adjacent to
NY11–4 and for particular space in NY11–4. The
Exchange believes that these actions would
facilitate a fair and orderly market and protect
investors and the public interest, consistent with its
obligations under the Act.
5 Half cabinets are not available to new
subscribers. See General 8, Section 1(a).
E:\FR\FM\03JYN1.SGM
03JYN1
]]>Agencies
[Federal Register Volume 89, Number 128 (Wednesday, July 3, 2024)]
[Notices]
[Pages 55293-55294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14646]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100447; File No. SR-ISE-2024-17]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Order Approving a
Proposed Rule Change To Amend the Strike Interval for Options on
Exchange-Traded Fund Shares and To Allow $1 Strike Price Intervals
Above $200 for Options on SPDR Gold Shares (GLD)
June 28, 2024.
I. Introduction
On May 3, 2024, Nasdaq ISE, LLC (``Exchange'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to amend Options
4, Section 5 of the Exchange's rules to (i) permit options on exchange-
traded fund shares to have an interval of $1 or greater where the
strike price is $200 or less and $5.00 or greater where the strike
price is greater than $200 and (ii) list options on SPDR[supreg] Gold
Shares (``GLD'') with $1 strike price intervals instead of $5 strike
price intervals when the strike price of the option is greater than
$200. The proposed rule change was published for comment in the Federal
Register on May 20, 2024.\3\ The Commission did not receive any comment
letters on the proposed rule change. This order approves the proposed
rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 100133 (May 14,
2024), 89 FR 43936 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
Currently, Options 4, Section 5 of the Exchange's rules provides
that the interval between strike prices of series of options on
exchange-traded fund shares (``ETFs'') \4\ will be fixed at a price per
share which is reasonably close to the price per share at which the
underlying security is traded in the primary market at or about the
same time such series of options is first open for trading on the
Exchange, or at such intervals as may have been established on another
options exchange prior to the initiation of trading on the Exchange,\5\
except that the interval between strike prices of series of options on
SPDR S&P 500 ETF (``SPY''), iShares Core S&P 500 ETF (``IVV''),
PowerShares QQQ Trust (``QQQ''), iShares Russell 2000 Index Fund
(``IWM''), and the SPDR Dow Jones Industrial Average ETF (``DIA'') may
be $1 or greater.\6\
---------------------------------------------------------------------------
\4\ See Exchange Rule Options 4, Section 3(h).
\5\ See Exchange Rule Options 4, Section 5(d).
\6\ See Exchange Rule Options 4, Section 5(e).
---------------------------------------------------------------------------
The Exchange proposes to establish an alternative to the strike
price interval regime described above. Specifically, ISE would also
allow the interval for options on ETFs to be $1 or greater where the
strike price is $200 or less and $5.00 or greater where the strike
price is greater than $200.\7\ As described above, the Exchange may fix
the interval between strike prices of series of options on ETFs at such
intervals as may have been established on another options exchange
prior to the initiation of trading on the Exchange.\8\ The Exchange
states that today, Cboe Exchange, Inc. (``Cboe'') \9\ permits the
interval between strike prices of series of options on ETFs to be $1 or
greater where the strike price is $200 or less and $5.00 or greater
where the strike price is greater than $200.\10\ The Exchange states
that its proposal adopts Cboe's language.\11\
---------------------------------------------------------------------------
\7\ See proposed Exchange Rule Options 4, Section 5(d).
\8\ See supra note 5.
\9\ See Cboe Rule 4.5, Interpretation and Policy .07(a).
\10\ See Notice, supra note 3, at 43936.
\11\ See id.
---------------------------------------------------------------------------
The Exchange also proposes to permit strike intervals to be $1 or
greater where the strike price is greater than $200 for options on
GLD,\12\ similar to options on SPY, IVV, QQQ, IWM, and DIA.\13\ The
Exchange states that $1 strike price intervals already exist below the
$200 price point and that GLD has consistently inclined in price toward
the $200 level.\14\ In light of this, the Exchange believes that
continuing to maintain the current $5 strike intervals above $200 may
have a negative effect on investing, trading and hedging opportunities,
and volume, particularly to the extent it impacts the ability of market
participants to roll their positions once strike prices pass $200.\15\
The Exchange states that the proposed strike setting regime will
``permit strikes to be set to more closely reflect the increasing value
in the underlying and allows investors and traders to roll open
positions from a lower strike to a higher strike in conjunction with
the price movements of the underlying ETF.'' \16\
---------------------------------------------------------------------------
\12\ According to the Exchange, GLD is an ETF whose shares are
designed to closely track the price and performance of the price of
gold bullion. See id. The Exchange states: ``GLD is widely quoted as
an indicator of gold stock prices'' and the ``leading product in its
asset class that trades within a `complex' where, in addition to the
underlying security, there are multiple instruments available for
hedging such as, COMEX Gold Futures; Gold Daily Futures; iShares
GOLD Trust; SPDR GOLD Minishares Trust; Aberdeen Physical Gold
Trust; and GraniteShares Gold Shares.'' Id.
\13\ See proposed Exchange Rule Options 4, Section 5(e).
\14\ See Notice, supra note 3, at 43937.
\15\ See id. For example, the Exchange states that ``to move a
position from a $200 strike to a $205 strike under the current rule,
an investor would need for the underlying product to move 2.5%''
whereas rolling an open position from a $200 to a $201 strike
represents ``only a 0.5% move from the underlying.'' Id.
\16\ Id.
---------------------------------------------------------------------------
The Exchange acknowledges that the proposal would increase the
total number of options series available on the Exchange, but
represents that it and the Options Price Reporting Authority (``OPRA'')
have the necessary system capacity to handle any potential additional
traffic associated with the proposal.\17\ The Exchange also states that
its members would not have a capacity issue as a result of the
proposal.\18\ Further, the Exchange represents that the proposal would
not cause fragmentation of liquidity but, by providing more trading
opportunities to market participants, instead would increase both
available liquidity as well as price efficiency.\19\
---------------------------------------------------------------------------
\17\ See id.
\18\ See id.
\19\ See id.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\20\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\21\ which
requires, among other things, that a national securities exchange have
rules designed to prevent fraudulent and manipulative acts and
practices, to promote just and
[[Page 55294]]
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. Permitting $1 strike price
intervals above $200 in options on GLD will provide the investing
public and other market participants with more flexibility in their
investment and hedging decisions using options on GLD. The proposal is
also consistent with past precedent for options on other similar
ETFs.\22\ Moreover, the proposal to specify the interval between strike
prices of series of options on ETFs where the strike price is less than
$200 and where the strike price is greater than $200 is consistent with
the intervals of another options exchange.\23\
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78f(b). In approving this proposed rule change,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\21\ 15 U.S.C. 78f(b)(5).
\22\ See Securities Exchange Act Release No. 85754 (Apr. 30,
2019), 84 FR 19823 (May 6, 2019) (allowing $1 Strike Price intervals
above $200 on options on QQQ and IWM).
\23\ See supra note 11.
---------------------------------------------------------------------------
In approving this proposal, the Commission notes that the Exchange
has represented that it and OPRA have the necessary systems capacity to
handle the potential additional traffic associated with this proposed
rule change.\24\ The Exchange further stated that it believes its
members will not have a capacity issue because of the proposal and that
it does not believe this expansion will cause fragmentation of
liquidity.\25\
---------------------------------------------------------------------------
\24\ See supra note 17.
\25\ See supra notes 18 and 19.
---------------------------------------------------------------------------
IV. Conclusion
IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the
Act,\26\ that the proposed rule change (SR-ISE-2024-17), be, and hereby
is, approved.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
---------------------------------------------------------------------------
\27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-14646 Filed 7-2-24; 8:45 am]
BILLING CODE 8011-01-P
